Samsung Compliance Committee Holds First Meeting After '1st Anniversary' Launch... Establishes Communication Channel with Business Support TF (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The Compliance Committee, an independent external compliance management oversight body of Samsung, is planning to meet with the 'Business Support Task Force (TF),' which has served as Samsung Group's control tower, during its first regular meeting since its first anniversary. Established in February last year during Vice Chairman Lee Jae-yong's trial for the state affairs manipulation case, the Compliance Committee has achieved meaningful results over the past year, including Lee's public apology and labor union activities, but was recently evaluated by the judiciary as falling short of effectiveness standards.

On the morning of the 16th, the Compliance Committee held a regular meeting at Samsung Electronics' Seocho building in Seoul and stated that it saw the need to prepare countermeasures for compliance risks related to the Business Support TF, deciding to establish a communication channel for this purpose. It is expected to be an opportunity for the Compliance Committee to directly meet with the Business Support TF to confirm its role and status and to understand compliance-related matters. A Compliance Committee official explained, "It means that we will coordinate schedules with the Business Support TF and meet as soon as possible to communicate for strengthening compliance."

The Business Support TF was newly established after Samsung abolished the Future Strategy Office (FSO), which had served as the group’s control tower and symbolized the group’s dismantling, in early 2017. With President Jung Hyun-ho, a former head of the FSO’s personnel support team, appointed as the team leader, some have raised concerns that it might be a revival of the FSO. In response, Vice Chairman Lee emphasized in his final statement during the retrial, "The Business Support TF, which the special prosecutor was concerned about, will be subject to stricter compliance monitoring than any other organization."

The Compliance Committee also announced that, following recent court rulings involving Vice Chairman Lee, former FSO head Choi Ji-sung, and former FSO deputy chief Jang Choong-ki, it will work with affiliates to develop concrete measures to prevent recurrence of such incidents. This follows the first meeting with CEOs of affiliates on the 26th of last month and is interpreted as a commitment to continuously communicate with affiliates and prepare responses to compliance risks.

During the meeting, the Compliance Committee received a report on the progress of external research services aimed at categorizing compliance risks for top executives and setting evaluation indicators and inspection items, deciding to promptly select a research institution. Additionally, it reviewed the Compliance Committee’s operational tasks and implementation plans for this year.

This meeting is the first regular meeting held after the official first anniversary on the 3rd. Chaired by former Supreme Court Justice Kim Ji-hyung, the Compliance Committee has held monthly regular meetings since its first meeting on February 5 last year, continuously monitoring external sponsorship expenditures, internal transactions, and transactions and mergers.

Over the past year, the Compliance Committee has strengthened Samsung’s monitoring and control functions for compliance management. It acknowledged past violations of compliance obligations during the succession process of the group’s ownership by the founding family, demanded a public apology to the people, and called for abandoning no-union management and establishing measures to restore trust with civil society. In response, Vice Chairman Lee issued a public apology in May last year, and seven Samsung affiliates signed a joint agreement to strengthen compliance management and allow labor union activities.

However, despite these efforts, the retrial court last month pointed out the ineffectiveness of the Compliance Committee, and Vice Chairman Lee was ultimately sentenced to two years and six months in prison and re-incarcerated. Four days after his detention, on the 21st of last month, Lee requested the Compliance Committee to "fulfill its original role," and the Committee responded, "We will prove our effectiveness solely through results. Regardless of the court’s ruling, we will continue to do our work."

Meanwhile, the Compliance Committee’s next regular meeting is scheduled for the 19th of next month.

This content was produced with the assistance of AI translation services.